The Total Economic Impact™ Of Resolve Systems’ Incident ... · From the information provided in...
Transcript of The Total Economic Impact™ Of Resolve Systems’ Incident ... · From the information provided in...
A Forrester Total Economic Impact™
Study Commissioned By Resolve Systems
July 2017
The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Table Of Contents Executive Summary 1
Key Findings 1
TEI Framework And Methodology 3
The Incident Response Automation Solution Customer Journey 4
Composite Organization 4
Key Challenges And Opportunities 5
Key Results 6
Financial Analysis 7
Cost Reduction Labor Savings 7
Cost Avoidance Labor Savings 8
Unquantified Benefits 10
Flexibility 10
Internal Labor To Administer Resolve Systems’ Cloud Solution 11
Resolve Cloud Fees 12
Financial Summary 13
Resolve Systems’ Incident Response Automation Solution: Overview 14
Appendix A: Total Economic Impact 15
Project Director:
Bob Cormier
Vice President and Principal Consultant
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1 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Executive Summary
Resolve Systems provides an enterprise-wide incident resolution solution
that helps customers accelerate and improve incident resolution and first call
resolution. It’s designed specifically for network, security, and IT operations
teams dealing with large volumes of incidents. It allows operations teams to
automate resolution procedures, as well as empower frontline agents with
human-guided automations and guided procedures to resolve incidents
without the need for costly and time-consuming escalations.
Resolve Systems commissioned Forrester Consulting to conduct a Total
Economic Impact™ (TEI) study and objectively examine the potential return
on investment (ROI) enterprises may realize by deploying the Resolve
Cloud Incident Response Automation solution. The purpose of this study is
to provide readers with a framework to evaluate the potential financial
impact of the Incident Response Automation solution on their organizations.
To better understand the benefits, costs, and risks associated with this
investment, Forrester interviewed two Resolve Systems customers with
three to five years of experience using the Resolve Systems’ solution.
Previous to investing in Resolve Systems’ solution, these interviewed
customers had numerous manual processes that were augmented by
homegrown tools that were developed in multiple software languages. The
Resolve Systems’ solution replaced almost all of these legacy tools and
processes.
Based on the interviews, Forrester constructed a TEI framework, a
composite Organization, and an associated ROI analysis that illustrates the
areas financially affected. The composite Organization is representative of
the two companies that Forrester interviewed and is used to present the
aggregate financial analysis in the next section. See the Composite
Organization section for more details.
Key Findings
Quantified benefits. Similar to the interviewed customers, the composite
Organization experienced the following risk-adjusted and present value
quantified benefits (see the Financial Analysis section for more details):
› Labor savings — significant cost reduction savings ($4,621,788). In
this study, cost reduction labor savings is defined as maintaining existing
volumes of work while reducing headcount. In this case, it is a direct
result of investing in Resolve Systems’ automation solution. With the
solution’s trackable metrics, the Organization can track and report on
specific costs and cost reduction by task, and across the 10 different
service desks. It can also track exactly how many staff are needed
based on volumes.
› Labor savings — significant cost avoidance savings ($7,671,074). In
this study, cost avoidance labor savings is defined as being able to
absorb higher volumes of work without the need to add headcount due
to the investment in Resolve Systems’ automation solution. The
Organization uses the Resolve Systems’ solution in its operations across
10 service desks and 1,000 agents. It adds about one or two service
desks every couple of years through acquisition.
Quantified Benefits
Cost reduction labor savings:
$4,621,788
Cost avoidance labor savings:
$7,671,074
Total quantified benefits: $12,292,863 (risk- and PV-adjusted)
2 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Unquantified benefits. The Organization experienced the following
benefits, which are not quantified in this study:
› Customer satisfaction. The Organization’s average alarm
acknowledgement time went down from 1,889 minutes (31 hours) before
the Resolve Systems’ solution to below 1 minute with the solution. MTTR
improved significantly but was not measurably tracked. This resulted in a
significant increase in customer satisfaction and a reduction in churn.
Forrester did quantify the savings with the automation of tasks; see the
section titled Cost Avoidance Labor Savings.
› Consistent processes. The Organization’s incident response
processes were not clearly documented and were found to be
inconsistent across experienced engineers and technicians. The
Resolve Systems’ solution helped standardize processes, which, in turn,
has improved employee morale and customer satisfaction.
Costs. The Organization experienced the following present value costs:
› Labor to implement and administer Resolve Systems ($443,591).
This includes internal labor to perform technical development, pre-
planning, implementation, and ongoing administration of the Resolve
Cloud solution.
› Resolve Systems’ fees ($3,090,043). This includes Resolve Systems’
fees for Resolve Cloud subscription services, professional services and
training.
Forrester’s interviews and subsequent financial analysis found that the
Organization experienced total benefits of $12,292,863 over three years
versus costs of $3,533,634, adding up to a net present value (NPV) of
$8,759,228, with a payback period of one month and an ROI of 248%.
If risk-adjusted costs, benefits, and ROI still demonstrate a compelling
business case, it raises confidence that the investment is likely to succeed
because the risks that threaten the project have been taken into
consideration and quantified. The risk-adjusted numbers should be taken as
“realistic” expectations, as they represent the expected value considering
risk. Assuming normal success at mitigating risk, the risk-adjusted numbers
should more closely reflect the expected outcome of the investment.
Total benefits
PV, $12.3M
Total costs PV,
$3.5M
Initial Year 1 Year 2 Year 3
Financial Summary
Paybackperiod -
one month
$4.6M
$7.7M
Cost reduction laborsavings
Cost avoidance laborsavings
Benefits (Three-Year)
ROI 248%
Benefits PV $12.3 million
NPV $8.7 million
Payback one month
3 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
TEI Framework And Methodology
From the information provided in the interview, Forrester has constructed a Total
Economic Impact™ (TEI) framework for those organizations considering investing
in the Resolve Systems’ Incident Response Automation solution.
The objective of the framework is to identify the cost, benefit, flexibility, and risk
factors that affect the investment decision. Forrester took a multistep approach to
evaluate the impact that the Resolve Systems’ Incident Response Automation
solution can have on an organization:
DUE DILIGENCE Interviewed Resolve Systems’ stakeholders to gather data relative to the Incident Response Automation solution.
CUSTOMER INTERVIEW Interviewed two customers using the Incident Response Automation solution to obtain data with respect to costs, benefits, and risks.
FINANCIAL MODEL FRAMEWORK Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewed customers.
CASE STUDY Employed four fundamental elements of TEI in modeling the Resolve Systems’ Incident Response Automation solution’s impact: benefits, costs, flexibility, and risks. Given the increasing sophistication that enterprises have regarding ROI analyses related to IT investments, Forrester’s TEI methodology serves to provide a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
The TEI methodology
helps companies
demonstrate, justify, and
realize the tangible value
of IT initiatives to both
senior management and
other key business
stakeholders.
DISCLOSURES
Readers should be aware of the following:
This study is commissioned by Resolve Systems and delivered by Forrester
Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other
organizations will receive. Forrester strongly advises that readers use their own
estimates within the framework provided in the report to determine the
appropriateness of an investment in the Resolve Systems’ Incident Response
Automation Solution.
Resolve Systems reviewed and provided feedback to Forrester, but Forrester
maintains editorial control over the study and its findings and does not accept
changes to the study that contradict Forrester’s findings or obscure the
meaning of the study.
Resolve Systems provided the customer name for the interview but did not
participate in the interview.
4 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
The Incident Response Automation Solution
Customer Journey
BEFORE AND AFTER THE RESOLVE SYSTEMS INCIDENT RESPONSE
AUTOMATION SOLUTION INVESTMENT
For this study, Forrester conducted interviews with two Resolve Systems’
Incident Response Automation solution customers. Interviewed customers
include the following:
Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a
composite Organization, and an associated ROI analysis that illustrates
the areas financially affected. The composite Organization is
representative of the two companies that Forrester interviewed and is used
to present the aggregate financial analysis in the next section. The
Organization is using the Resolve Cloud solution has the following
characteristics:
› Description of composite Organization. It is a US-based,
multibillion-dollar business-to-consumer (B2C) and business-to-
business (B2B) company that provides sales, customer support, and
service/warranty support for its products in high volume. The
Organization has a strong brand, a large customer base, and a strong
online and offline presence. Prior to investing in the Resolve Systems’
solution, it conducted a comprehensive vendor selection process
resulting in it choosing the Resolve Systems’ Incident Response
Automation solution. The driving factors were cost, flexibility,
reliability, high availability, social collaboration, scalability, and high
integration capabilities with existing systems.
› Deployment characteristics. The Organization uses the Resolve
Systems’ Incident Response Automation solution in its operations
across 10 service desks and 1,000 agents. It adds about one or two
service desks every couple of years through acquisition.
› Systems that integrate with the Resolve Systems’ solution.
Resolve Systems integrates with the following systems: security
management, service management, event management,
system/network management, DevOps and configuration
management, network devices, knowledge management, ticketing
system, IT process automation and business intelligence, inventory,
topology, trouble ticket dispatch, performance, change management,
and network test management system (NTMS) or test heads.
INDUSTRY REGION INTERVIEWEE NUMBER OF AGENTS
Communications Headquartered in the US Network systems manager 14 service desks and over 1,000 service desk agents
Communications Headquartered in the US Director of engineering 1,000 service desk agents
Key assumptions
› 1,000 agents
› 10 service centers
› Average acknowledgement
time:
o Before Resolve: 31 hours
o With Resolve: 1 minute
5 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
› Vendor devices that it provides coverage for. The Organization’s
service desk staff is challenged with being responsible for over 100
network service provider equipment vendors, including routers,
switches, digital subscriber line access multiplexers (DSLAMs), and
voice switches.
Key Challenges And Opportunities
The Organization shared the following issues, drivers, challenges, goals,
and opportunities with the interviewed customers:
› Expensive incident escalation.
› Too much time to resolve issues. This hurt the customer experience.
› Too much event noise. This resulted in missed incidents and
operational inefficiencies.
› Not all incidents created equal. Some have a high impact on the
business, while others are simple, repetitive incidents.
› A requirement to reduce operational cost while growing. The
Organization had a mandate to reduce headcount and operational
costs, but the network environment was still growing. As the network
grew, there were more networks, more alarms, more outages, and
more incidents — and the expectation was to manage that growth with
fewer resources.
› Not meeting key performance indicators (KPIs). KPIs such as mean
time to acknowledge an alarm was very high, and mean time to repair
(MTTR) was also too high. Immediate growth in networks was going to
come with new product expansion. The Organization lacked
confidence that it could support a new product when it wasn’t meeting
its KPIs for the old products.
› Customer satisfaction taking a hit. With customer satisfaction
decreasing, the Organization experienced some churn.
› Reduced employee morale. The Organization was developing
employee morale issues, based on internal survey results that cited
poor customer service and complaints and inconsistent incident
responses.
› Inconsistent processes. The Organization’s incident response
processes were not clearly documented and were found to be
inconsistent across experienced engineers and technicians. Resolve
Systems has helped standardize processes, which, in turn, has
improved employee morale and customer satisfaction.
› Data residing in multiple systems. Prior to Resolve Systems, the
Organization had to manage data from multiple systems, such as the
alarm system, trouble ticket system, inventory system, and dispatch
system.
6 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Key Results
The interviews revealed several key results attributed to the Resolve
Systems’ Incident Response Automation solution, as follows:
› Trackable metrics. The Organization is now able to track incident
response processes and metrics. Examples include: How many alarms
were acknowledged and what was the average time to acknowledge?
How many trouble tickets were created and how long did it take to
create them? How many devices did we log into and perform triage
and diagnostic repair functions to validate alarm conditions? And how
many dispatches did we invoke?
› End-to-end process automation. For the first service desk center, the
Organization automated all that was feasible. And of that work that’s
been automated, Resolve Systems automated the entire end-to-end
process.
› Acceleration of incident response and resolution. Resolve Systems
provides agents with human-guided automations, real-time incident
collaboration, and the ability to both partially and fully automate
processes. Although the interviewed customer was not tracking time to
resolution, readers should be tracking this important metric.
› Significant and ongoing cost avoidance and cost reduction. With
the trackable metrics described above, the Organization can report on
cost avoidance and cost reduction by task and by service desk. It can
track exactly how many staff are needed based on volumes.
› Consistent processes. The Organization’s incident response
processes are now clearly documented and available across all
engineers and technicians. Resolve Systems has helped standardize
processes, which, in turn, has improved employee morale and
customer satisfaction.
“We’re using the Resolve
solution in a way that
enhances the technician’s
ability. We’re still enabling our
technicians to be craftsmen in
a way that they resolve and
interact with a customer. And
we are also facilitating a more
robust standards-based
engine that feeds information
to them so that they can make
good decisions. And that’s
really what it’s all about is
making good decisions on
behalf of your customers.”
Director of engineering,
communication company
7 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Financial Analysis
QUANTIFIED BENEFIT AND COST DATA
Cost Reduction Labor Savings
Cost reduction labor savings is defined as maintaining existing volumes
of work while reducing headcount. In this case, it is a direct result of
investing in Resolve Systems’ automation solution.
With the solution’s trackable metrics, the Organization can track and
report on specific costs and cost reduction by task. It can also track
exactly how many staff are needed based on volumes.
The Organization uses Resolve Systems’ Incident Response
Automation solution in its operations across 10 service desks and 1,000
agents. It adds about one or two service desks every couple of years
through acquisition. Our interviews revealed that:
› Tracking metrics told a troubling story. The average alarm
acknowledgement time was an unacceptably high, at 1,889 minutes.
That’s a little over 31 hours to get to an alarm when a customer is
down. The Organization has a MTTR goal of restoring customers in
less than 4 hours. Before Resolve Systems, it was taking 31 hours to
get to those existing alarms due to lack of automation.
› Average acknowledgement time improved dramatically with
Resolve Systems. For the initial use of the automation solution, the
Organization programmed Resolve Systems to become a pseudo-
engineer. The Resolve solution acknowledged an alarm, created the
trouble ticket, logged into the device, validated the alarm condition,
updated the diagnostic notes in the trouble ticket, and executed
resolution procedures. The average acknowledgement time went from
1,889 minutes to 1 minute using the Resolve Systems’ Incident
Response Automation solution. MTTR improved significantly but was
not measurably tracked.
› The Organization experienced significant ongoing cost reduction.
With the tracking metrics described above, the Organization can report
on cost reduction by task and by service desk. It can also track exactly
how many staff are needed based on volumes.
The average fully loaded cost per service desk technician is $91,000,
and the Organization reduced service desk headcount by the data in row
A2 in the table below, equaling the risk-adjusted total dollars in row Atr.
The table above shows the total of all benefits across the areas listed below, as well as present values (PVs) discounted at 10%. Over three years, the Organization expects risk-adjusted total benefits to be a PV of more than $12.2 million.
Total Benefits
REF. BENEFIT YEAR 1 YEAR 2 YEAR 3 TOTAL PRESENT
VALUE
Atr Cost reduction labor savings $728,000 $2,475,200 $2,548,000 $5,751,200 $4,621,788
Btr Cost avoidance labor savings $1,820,000 $2,912,000 $4,804,800 $9,536,800 $7,671,074
Total benefits (risk-adjusted) $2,548,000 $5,387,200 $7,352,800 $15,288,000 $12,292,863
Cost reduction labor savings — 38% of total benefits
38%
three-year benefit PV
$4.6 million
8 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Modeling and assumptions. The Resolve Cloud solution (SaaS) allowed
for fast implementation as represented in Row A2. Forrester assumed an
industry average fully loaded cost of $91,000 for the service desk staff.
Risks. Forrester considered the following potential risks when assigning a
risk adjustment:
› Other organizations may see delays in attrition of redundant
headcount, resulting in delays in achieving the savings.
› Readers’ labor costs may be less than $91,000 (fully loaded), thereby
reducing the labor savings benefits.
› Other organizations may experience slower rollout and adoption of the
functionality of Resolve Systems’ solution.
To account for these risks, Forrester adjusted this benefit downward by
20%, yielding a three-year risk-adjusted total PV of $4,621,788.
Cost Avoidance Labor Savings
In this study, cost avoidance savings is defined as being able to absorb
higher volumes of work without needing to add headcount due to an
investment in Resolve Systems’ solution.
The Organization uses the Resolve Systems’ Incident Response
Automation solution in its operations across 10 service desks and 1,000
agents. It adds about one or two service desks every couple of years
through acquisition.
Previous to deploying the Resolve Systems’ solution, the Organization
forecasted that future alarm volumes would increase significantly. At the
same time, it was being asked to reduce IT headcount. Our interviews
revealed that:
› Tracking metrics told a troubling story. The average alarm
acknowledgement time was an unacceptably high 1,889 minutes.
That’s a little over 31 hours to get to an alarm when a customer is
down. The Organization has a MTTR goal of restoring customers in
less than 4 hours. Before Resolve Systems, it was taking 31 hours to
get to those existing alarms due to a shortage of headcount. The
Organization deployed Resolve Systems to support all the new
networks that were going in and the sheer volume of alarms that it was
getting. MTTR improved significantly but was not measurably tracked.
Cost Reduction Labor Savings
REF. METRIC CALC./SOURCE YEAR 1 YEAR 2 YEAR 3
A1 Average fully loaded cost of help desk technicians
Interviews $91,000 $91,000 $91,000
A2 Headcount cost reduction (full-time equivalents [FTEs])
Interviews 10.0 34.0 35.0
At Cost reduction labor savings A1 * A2 $910,000 $3,094,000 $3,185,000
Risk adjustment ↓20%
Atr Cost reduction labor savings (risk-adjusted) $728,000 $2,475,200 $2,548,000
“Our average alarm
acknowledgement time went
down from 1,889 minutes (31
hours) before the Resolve
Systems’ solution to below 1
minute with the solution. Our
MTTR improved significantly
but was not measurably
tracked.”
Network systems manager,
communications company
9 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
For the initial use of the automation solution, The Organization
programmed Resolve Systems to become a pseudo-engineer. It
acknowledged an alarm, created the trouble ticket, logged into the
device, validated the alarm condition, updated the diagnostic notes in
the trouble ticket and dispatched the technician. The average
acknowledgement time went from 1,889 minutes to one minute using
the Resolve Systems’ Incident Response Automation solution.
› With Resolve Systems, the Organization saved on labor costs.
The average fully loaded cost per service desk technician is $91,000.
The Organization reduced service desk headcount by the data in rows
B2 and B3 in the table below, equaling the risk-adjusted total dollars in
row Btr.
› With Resolve Systems, the Organization improved customer wait
times and increased technician productivity. Service desk staff
used to spend 6 minutes manually gathering data from a broad
spectrum of infrastructure services to diagnose customer issues. The
Resolve Systems’ solution now does the same task in 4 seconds,
improving customer wait times and increasing technician productivity.
The average fully loaded cost per service desk technician is $91,000, and
the Organization reduced service desk headcount by the data in row B2 in
the table below, equaling the risk-adjusted total dollars in row Btr.
Modeling and assumptions. The Resolve Cloud solution (SaaS) allowed
for fast implementation as reflected in Row B2. Forrester assumed an
industry average fully loaded cost of $91,000 for the service desk staff.
Risks. Forrester considered the following potential risks when assigning a
risk adjustment:
› Other organizations may see delays in attrition of redundant
headcount, resulting in delays in achieving the savings.
› Readers’ labor costs may be less than $91,000 (fully loaded), thereby
reducing the labor savings benefits.
› Other organizations may experience slower rollout and adoption of the
functionality of Resolve Systems’ solution.
To account for these risks, Forrester adjusted this benefit downward by
20%, yielding a three-year risk-adjusted total PV of $7,671,074.
Cost Avoidance Labor Savings
REF. METRIC CALC./SOURCE YEAR 1 YEAR 2 YEAR 3
B1 Average fully loaded cost of help desk technicians
Interviews $91,000 $91,000 $91,000
B2 Ongoing FTE avoidance Interviews 25 40 66
B3 Ongoing FTE cost avoidance savings B1 * B2 $2,275,000 $3,640,000 $6,006,000
Bt Cost avoidance labor savings B3 $2,275,000 $3,640,000 $6,006,000
Risk adjustment ↓20%
Btr Cost avoidance labor savings (risk-adjusted)
$1,820,000 $2,912,000 $4,804,800
Cost avoidance labor savings — 63% of total
benefits
63%
three-year benefit PV
$7.7 million
10 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Unquantified Benefits
Unquantified benefits. The Organization experienced the following
benefits, which are not quantified in this study:
› Customer satisfaction. The Organization’s average alarm
acknowledgement time went down from 1,889 minutes (31 hours)
before the Resolve Systems’ solution to below 1 minute with the
solution. MTTR improved significantly but was not measurably tracked.
This resulted in a significant increase in customer satisfaction and a
reduction in churn. Forrester did quantify the labor savings associated
with the automation of tasks; see the section titled Cost Avoidance
Labor Savings.
› Consistent processes. The Organization’s incident response
processes were not clearly documented and were found to be
inconsistent across experienced engineers and technicians. Resolve
Systems has helped standardize processes, which, in turn, has
improved employee morale and customer satisfaction.
Flexibility
The value of flexibility is clearly unique to each customer, and the measure
of its value varies from organization to organization. There are scenarios in
which a customer might choose to implement Resolve Systems’ solution
and later realize additional uses and business opportunities. Here’s a
future flexibility option that the Organization is considering:
› Better customer experience. In the future, the Resolve Systems’
Incident Response Automation solution will allow for a better
customer experience. When a customer calls into the service desk,
there is a significant knowledge gap between the reason for the call
and what the technician understands on the other end. The Resolve
Systems’ solution provides the single pane of glass to present data
from and across the Organization’s many integrated systems (e.g.,
service management, event management, system/network
management, configuration management, network devices,
knowledge management, ticketing system, IT process automation and
business intelligence, inventory, topology, trouble ticket dispatch, and
change management).
This single pane of glass give technicians the ability to more
effectively validate the problem and collaborate with the customer on
a resolution. For each incoming call, the Resolve Systems’ solution
creates a data mining exercise in the background while the technician
is establishing those fundamental pieces of information that
essentially levels the playing field and enhances the customers’
experiences. Here’s what a conversation may sound like: “Oh, here is
your bandwidth graph for the past two hours.” “Yes, I see that you are
not passing traffic.” This is valuable information that reassures a
customer, “Hey, you know what? We understand what your problem is
and I’m able to see real-time information that either validates or
refutes your claim and can point us toward a path to resolution very
quickly.”
Flexibility would also be quantified when evaluated as part of a specific
project (described in more detail in Appendix A).
Flexibility, as defined by TEI, represents an investment in additional capacity or capability that could be turned into business benefit for a future additional investment. This provides an organization with the "right" or the ability to engage in future initiatives but not the obligation to do so.
How much time to
implement and realize the
benefits?
Only four weeks of effort
across two individuals.
“For the first help desk center,
we’ve automated 80% of the
work. And of that work that’s
been automated, 80% is
touchless, meaning we’ve
automated the entire end-to-
end process. Our goal is to be
touchless and pure
automation. We do not intend
on having a large tier one staff
once we complete the
deployment of the Resolve
environment.”
Network systems manager,
communications company
11 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Internal Labor To Administer Resolve Systems’
Cloud Solution
This cost includes internal labor to perform technical development, pre-
plan the deployment, and support and administer the solution:
› Pre-planning the implementation. The Organization conducted pre-
planning activities over a three-month period; however, it totaled only
four weeks of actual effort across two individuals. In addition, Resolve
Systems provided professional services support during pre-planning
activities.
› Internal labor to administer Resolve Cloud Solution. This internal
labor helped manage the relationship with Resolve Systems, and the
internal questions or issues that were escalated.
› Modeling and assumptions. Forrester assumed an industry average
fully loaded cost of $140,000 for technical development, pre-planning
the deployment, and support and administration of Resolve Systems’
solution.
Risks. Forrester considered the following potential risks when assigning
a risk adjustment:
› The costs to other organizations may be greater considering the
variable cost of hardware, software, and labor in the marketplace.
Forrester adjusted this cost upward by 20%, yielding a three-year risk-
adjusted total PV of $443,591.
Total Costs
The table above shows the total of all costs across the areas listed below, as well as present values (PVs) discounted at 10%. Over three years, the organization expects risk-adjusted total costs to be a PV of $3,533,634.
REF. COST INITIAL YEAR 1 YEAR 2 YEAR 3 TOTAL PRESENT
VALUE
Ctr Resolve Systems’ customer administration
$25,800 $168,000 $168,000 $168,000 $529,800 $443,591
Dtr Resolve Systems’ fees $0 $1,242,552 $1,242,552 $1,242,552 $3,727,656 $3,090,043
Total costs (risk-adjusted)
$25,800 $1,410,552 $1,410,552 $1,410,552 $4,257,456 $3,533,634
Internal Labor To Administer Resolve Systems’ Cloud Solution
REF. METRIC CALC./SOURCE INITIAL YEAR 1 YEAR 2 YEAR 3
C1 Pre-planning the deployment 4 weeks of effort
* two FTEs $21,500 $0 $0 $0
C2 Administering Resolve Systems’ solution
1 FTE $0 $140,000 $140,000 $140,000
Ct Labor to administer Resolve Systems’ solution
C1 + C2 $21,500 $140,000 $140,000 $140,000
Risk adjustment ↑20%
Ctr Labor to administer Resolve Systems’ solution (risk-adjusted)
$25,800 $168,000 $168,000 $168,000
“I consider Resolve Systems
to be my premier partner.
They listen to me. They’re
responsive to me, addressing
issues that I have and
providing solutions. The
reasons I consider Resolve
Systems as my premier
partner — the problems that
they help me with — they’re
not always revenue-generating
opportunities for them to gain
more money from me.”
Network systems manager,
communications company
12 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Resolve Cloud Fees
This includes Resolve Systems’ fees for Resolve Cloud subscription
services, professional services and training.
See the benefits section for more details on the labor savings associated
with Resolve Systems.
Modeling and assumptions. The fees were provided by Resolve
Systems and could not be confirmed by Forrester. Fees are represented in
the table below.
Risks. Forrester risk adjusted upward by 20% Resolve’s Cloud fees due to
our inability to confirm fees, and variability in customer discounts.
Implementation risk is the risk that a proposed investment may deviate from the original or expected requirements, resulting in higher costs than anticipated. The greater the uncertainty, the wider the potential range of outcomes for cost estimates.
Resolve Systems’ Fees
REF. METRIC CALC./SOURCE INITIAL YEAR 1 YEAR 2 YEAR 3
Ct Resolve Systems’ fees for Resolve Cloud subscription services, professional services and training
Resolve Systems
$0 $1,035,460 $1,035,460 $1,035,460
Risk adjustment 20%
Ctr Resolve Systems’ fees (risk-adjusted)
$0 $1,242,552 $1,242,552 $1,242,552
13 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Financial Summary
CONSOLIDATED THREE-YEAR RISK-ADJUSTED METRICS - ORGANIZATION
Cash Flow Chart (Risk-Adjusted)
If risk-adjusted costs, benefits, and ROI still demonstrate a compelling business case, it raises confidence that the
investment is likely to succeed because the risks that threaten the project have been taken into consideration and
quantified. The risk-adjusted numbers should be taken as “realistic” expectations, as they represent the expected
value considering risk. Assuming normal success at mitigating risk, the risk-adjusted numbers should more closely
reflect the expected outcome of the investment.
-$4.0 M
-$2.0 M
$2.0 M
$4.0 M
$6.0 M
$8.0 M
$10.0 M
$12.0 M
Initial Year 1 Year 2 Year 3
Cashflows
Total costs
Total benefits
Cumulative net benefits
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite Organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI,
NPV, and payback period
values are determined by
applying risk-adjustment
factors to the unadjusted
results in each Benefit and
Cost section.
Cash Flow Table (Risk-Adjusted)
INITIAL YEAR 1 YEAR 2 YEAR 3 TOTAL PRESENT
VALUE
Total costs ($25,800) ($1,410,552) ($1,410,552) ($1,410,552) ($4,257,456) ($3,533,634)
Total benefits $0 $2,548,000 $5,387,200 $7,352,800 $15,288,000 $12.292,863
Net benefits ($25,800) $1,137,448 $3,976,648 $5,942,248 $11,030,544 $8,759,228
ROI 248%
Payback period one month
14 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Resolve Systems’ Incident Response Automation
Solution: Overview
The following information is provided by Resolve Systems. Forrester has not validated any claims and
does not endorse Resolve Systems or its offerings. Resolve is a centralized solution that allows employees
to follow step-by-step procedures to bring incidents to resolutions quickly. Its features include:
› Interactive process guidance. Guided incident resolution with step-by-step instructions, decision trees,
and automations.
› Incident resolution dashboard. Summary results of automated tests and diagnostics with easy-to-follow
troubleshooting actions.
› Analytics and process improvement. Reporting and analytics integrated with social collaboration for
proactive process improvement.
› Human-guided automation. Automated actions performed incrementally as part of interactive resolution
guidance process.
› End-to-end resolution automation. Automated diagnostics and resolution of incident without operator
interaction.
› Incident ecosystem connectivity. Integration solution connecting all systems, devices, and applications,
accelerating incident resolution.
15 | The Total Economic Impact™ Of Resolve Systems’ Incident Response Automation Solution
Appendix A: Total Economic Impact
Total Economic Impact is a methodology developed by Forrester Research
that enhances a company’s technology decision-making processes and
assists vendors in communicating the value proposition of their products
and services to clients. The TEI methodology helps companies
demonstrate, justify, and realize the tangible value of IT initiatives to both
senior management and other key business stakeholders.
Total Economic Impact Approach
Benefits represent the value delivered to the business by the
product. The TEI methodology places equal weight on the
measure of benefits and the measure of costs, allowing for a
full examination of the effect of the technology on the entire
organization.
Costs consider all expenses necessary to deliver the
proposed value, or benefits, of the product. The cost category
within TEI captures incremental costs over the existing
environment for ongoing costs associated with the solution.
Flexibility represents the strategic value that can be
obtained for some future additional investment building on
top of the initial investment already made. Having the ability
to capture that benefit has a PV that can be estimated.
Risks measure the uncertainty of benefit and cost estimates
given: 1) the likelihood that estimates will meet original
projections and 2) the likelihood that estimates will be
tracked over time. TEI risk factors are based on “triangular
distribution.”
The initial investment column contains costs incurred at “time 0” or at the
beginning of Year 1 that are not discounted. All other cash flows are discounted
using the discount rate at the end of the year. PV calculations are calculated for
each total cost and benefit estimate. NPV calculations in the summary tables are
the sum of the initial investment and the discounted cash flows in each year.
Sums and present value calculations of the Total Benefits, Total Costs, and
Cash Flow tables may not exactly add up, as some rounding may occur.
PRESENT VALUE (PV)
The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total NPV of cash flows.
NET PRESENT VALUE (NPV)
The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made, unless other projects have higher NPVs.
RETURN ON INVESTMENT (ROI)
A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.
DISCOUNT RATE
The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%.
PAYBACK PERIOD
The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.